A number of performance measures are used within a health care organization to determine fiscal solvency. Kindig (1998) pointed out that the most basic measures include cost per unit of service, but that such measures are often inadequate to assess performance because of the wide variety of programs and clinical/surgical services that are offered within a single institution. Obtaining data on reimbursement rates is seen by Kindig (1998) as one way of determining average cost per service by category or type. While different insurance companies and third party payers have different rate schedules for reimbursement, health care institutions must achieve an average reimbursement level or every service offered. Consequently, examining fluctuations in the cost of services over time and comparing costs to revenues is useful.
Additionally, fiscal solvency is seen by Berwick and Coye (2003) as directly related to non-economic performance indicators which include health outcomes for patients. Using measures of repeat hospitalizations can be helpful in determining the overall efficacy of service provision. Overall, however, performance measures are unlikely to be consistently applied across all clinical programs and services. Most hospital or health care departments have unique performance indicators and varied service costs. Consequently, individualized performance measures are directly related to a determination of fiscal solvency.
All health care institutions have limited resources available to them and are required to participate in quality assurance (QA) and quality improvement (QI) actions to remain certified (Fisher, 2006). With limited resources available, most institutions target resource deployment to meet the most pressing needs identified within the organization and to address the most critical QA and QI requirements and a host of often conflicting standards, guidelines, and goals imposed externally as well as in...